The proposed study aims to identify the major challenges for blockchain adoption to manage reverse logistics activities of recyclable hospital waste in the Indian healthcare sector, in the COVID era. Fifteen challenges are identified through literature review and experts’ views and are prioritized and analyzed for cause-and-effect relationships using a hybrid approach combining Best–Worst Method (BWM) and Decision-Making Trial and Evaluation Laboratory (DEMATEL). A sensitivity analysis is performed to evaluate the results’ robustness. The results reveal that the Technological and Regulatory challenges category plays the most influential role consisting of Lack of Government Support and Policies, Lack of Strategic Planning, Lack of Knowledge and Qualified Expertise, Lack of Standards and Regulations, High Cost Involved, and Lack of Top Management Support are the most significant challenges affecting blockchain adoption. This study can support healthcare stakeholders, policymakers, government, and researchers in planning the strategic removal of the challenges to blockchain adoption in the Indian healthcare sector. The identification of the mutual interaction among the challenges will help healthcare decision makers address strategic questions of waste management from a holistic point of view. Since the work is achieved in the Indian healthcare context, generalization of the results must be carefully considered. The present study contributes significantly to discussing blockchain’s potential in healthcare waste management. The study’s findings can aid decision making process of managers, policymakers, and benefit researchers in this field.